Opera president denies ugliest rumors

City wouldn't cut Civic Center rent.

Karen Cohn, chairwoman of San Diego Opera, says if some moneybags comes forward with a fat gift, the opera would love to start business again. I interviewed her because Ian Campbell, general director, said he will not do any more talking.

One of the ugliest rumors making the rounds is that Ian and Ann Campbell, his ex-wife, were going to make $2.5 million in retirement benefits, and might lose them, or a lot of them, if the company would go bankrupt, and that's why it took on no debt and is in a hurry to close. Says Cohn, "They will not get retirement funds," including medical coverage and severance. "There is no golden parachute," Cohn says. "They are both devastated, their reputations are tarnished, there is talk of misappropriation of funds," but none of this talk is true. Ann stops getting paid in April and Ian will only be paid until the company is dissolved.

However, Cohn defends the money they were paid annually over the years. They were paid more than $1 million for the year ended in mid-2010, even though Ian Campbell had told me in early 2009 that the company would have to make sharp cuts because of the economy. For the year ended in 2012, their combined pay had dropped to around $800,000, but many people I talk with say that is still excessive for a troubled company the size of San Diego Opera. In 2010, Ian Campbell justified his salary of almost $700,000 by saying he had two jobs that required 75 hours of work a week — administrative director and artistic director. (I am one of those who finds this defense rather weak. A lot of people wear two hats — or more.)

One of the big costs was that the opera paid $750,000 a year rent to the Civic Center, owned by the City. Several times the opera tried to get relief on that rent, but to no avail. I reminded her that the City will almost certainly give the Chargers $700 million for a new stadium. She sighed, "Don't even talk to me about that — the City makes more income from arts than from sports."

The late Joan Kroc gave the opera $11 million in 2004. Kroc said the money had to go to highest-quality opera. The Kroc money ran out this year. The company had planned a promising 2015 season, its 50th anniversary, but the money just wasn't there. Potential large donors weren't listening. Many who died did not leave San Diego Opera in their wills. The opera had formerly filled more than 80% of the seats, but that dropped to 75% last year, and will be 60% this year, although there is now a rush to buy tickets for the final opera.

San Diego corporations — particularly biotechs — are not good sources of money, she says. The board discussed declining attendance and donations over several years, but didn't want to face liquidation, always hoping an angel would show up.

She did admit one rumor: the vote on dissolving was not on the board's agenda when the vote was taken. There were 58 people who could have voted, but only 34 did. The reason dissolution was not put in writing was that management wanted the staff to be told before reading about it. That didn't happen. Another ugly rumor is true: the Union-Tribune printed it before the board even voted. Someone had called Jim Chute, arts editor, during the meeting, Cohn says. He was not to print it until the staff was told, but didn't wait.

The board did consider other options such as lighter fare (Franz Lehar, Gilbert & Sullivan, American musicals, for example), she says. However, the mission statement and Kroc bequest both discouraged popular fare. "We literally talked about Man of La Mancha, but Ian didn't think it would sell," she says.

Comments

Don, now that you've heard the denials and the explanation, do you believe it is true? The fact that only 34 board members voted, out of 58 who could have voted, is troubling. Even if the 34 voted the shutdown unanimously, that didn't make it right. What could be more important, and require the full board in attendance, than a proposal to disband? With some debate, the vote could have gone the other way.

Yes, you are correct on much of what you say, but the actual vote was recorded as 33 - 1. Many people have wondered who that ONE was, and if that individual would be interested in heading a new group.

I am happy to report that the petition to keep SD Opera alive is now over 13,000. These are people from all over, and as the site allows comments, it is interesting to read that there are many people who come here from all over and attend the opera. It is a draw.

The fact that the city of San Diego wouldn't give any concessions on the annual rent is interesting to know. I wonder if the city would be interested in negotiating at this point? Wouldn't it be better to get something rather than nothing?

Visduh, your point that the full board should have been in attendance for such an important vote is certainly on target. This was handled far too casually, as if it were a small deal among friends--and that may have been a large part of the problem.

eastlaker: The explanation that the board was not told it would be voting on the demise of the opera is extremely weak. Everyone should have been told; the staff could have been informed simultaneously. The City's unwillingness to cut the $750,000 rent, when it has given, and will be giving, hundreds of millions of dollars to professional sports teams owned by billionaires, will make San Diego a laughingstock among intellectuals.

I am delighted to see petition signers are above 13,000. I called the person supposedly in charge and he hasn't called me back. Best, Don Bauder

Visduh: As I have said on prior blogs, I am torn on this one. If you look at San Diego Opera numbers, and numbers from other opera companies -- dead or still struggling -- it is clear that grand opera is in the early or middle stages of a death spiral. San Diego Opera may have gotten ahead of the curve.

But I believe it should have tried musicals (Lyric Opera of Chicago is doing Carousel next season). Indeed, I talked to Ian Campbell once and he said he would like to do a Gilbert & Sullivan. San Diego Opera could have made other cuts. I do think Ian and Ann Campbell were overpaid, but as I confessed on another blog, I knew that when I was on the advisory board and didn't say anything. The opera slowed down its presentations of 20th century operas but not enough. Best, Don Bauder

This defense mentions something more insidious than anything I imagined, that the full board was not informed before the vote. Even though a bare majority of the total board approved, the issue is whether the donors on the board would pony up enough to continue, perhaps they wouldn't, but this method has all the sneakiness of an evil scheme. Nothing she says touches the key issues, if there is no money to continue, why did they list millions in net assets? Who spent this money, where did they spend it, why did they spend it? What are they doing with the scores, costumes and sets? When did the lies start?

As for their implied insult to more modern Musical Comedies, Don Quixote is just older and French, it's musical comedy. If Ian Campbell believes it has more appeal than Man of La Mancha with a San Diego audience he's lost his mind.

There was a costume sale last weekend, and the website reported that prices were starting at $1 and would go up to $750 or so, as I recall. But I don't know if this is an annual event, or the first time this was done.

Psycholizard: The fact that the board was not informed of the upcoming vote is reprehensible. I don't know what will happen to the company's assets. That has to be clarified. SDO has a shop that makes sets that are rented out to other companies. What happens to that shop?

The fact that the U-T was told before the board even voted smells to high heaven. Best, Don Bauder

Don - in my experience, it is misappropriation, failure says so. No future potential seals the deal. I am filing a motion tomorrow to protect "old" stock shares, and vote not to reorganize without fair deal.

The entire Opera Board should have voted on a matter of such magnitude.

The City of San Diego -- its terrible ignorant mayors and its awful ignorant city council members -- was derelict not to cut the Opera's rent on the Civic Center. Mayor Filner would not have been party to this disaster without turning heaven and earth to keep the Opera in business.

monaghan: I didn't ask about Filner, but I tend to agree. He is a lover of the arts. He was probably not in office long enough to tackle the issue. But Sanders was no help to the opera and apparently Faulconer has been no help. That is hardly surprising. Best, Don Bauder

Joseph Grienenberger: I agree that SD Opera should have tried lighter fare. I remember a discussion I had with Richard Bonynge, husband of the late Joan Sutherland, and a great conductor. He said it was ridiculous to call Merry Widow and Die Fledermaus light fare, or even operettas. He said the singing in those operas was just as difficult as the singing in grand operas. I do not think the opera's mission statement or Joan Kroc's bequest were insuperable barriers to putting on more popular fare. Best, Don Bauder

PhilCarol Vincelett: I agree. Under Tito Capobianco, SDO did a nationally-televised Merry Widow that helped put the company on the map. It was excellent. Beverly Sills had sung in many Merry Widow productions through the years. Best, Don Bauder

Net assets are listed, but there is said to be no cash to continue. We should consider that possibly the assets were mismanaged, rather than the company. The bleeding in the presented figures is reasonable, perhaps normal for non profits. Money might have been invested unwisely, while at the same time loans were taken out on the assets, that can make money disappear quickly.

It's time for complete figures to be released. Concealed facts leads to speculation, and people often assume the worst. Decent people sometimes lose other peoples money, causing hundreds to lose their jobs, incredibly talented people produce wonderful Opera and flop, Beethoven comes to mind. But only criminals have any reason to hide the books.

Psycholizard: That has been my main message in three blogs: the opera MUST release more figures, and it MUST release its deliberations. If the opera feared going out of business for three years, how many on the board knew it, and how many alternative survival strategies were discussed? And what were they? Best, Don Bauder

eastlaker: Well, I guess we can't throw them in jail. A lawsuit -- and there have been hints of one -- might force the information out in the open. People who agreed to give money to the opera in their wills might have a suit, if their bequests assumed there would be an opera company. I would like to know how much money the opera spent on legal advice before announcing the closure. Some staffers might have a lawsuit, too. Best, Don Bauder

Vincent Hashtag-savedo Martin: Joan Kroc played popular music on the organ. As I said, I think the opera could have finessed its way around both Kroc's statement and the company's mission statement. I talked with Ian about Gilbert & Sullivan in the 1990s. He didn't mention violating the mission statement. Best, Don Bauder

Don, the most consistently reliable news source about San Diego politics is your column.

On the other hand, since Manchester bought out the U-T to give himself absolute control over San Diego politics he has given U-T the entirely new meaning of Untruthful-Tabloid.

The most overwhelming fact of life today in San Diego is that Manchester now uses the U-T for controlling politics with a constant effluent of editorial mendacities as well as cover-ups for the same purpose.

Manchester's power makes him a major cause of every San Diego social, political and economic failure, it's that simple.

Don't know if anyone will see this comment--but the UT actually has run an editorial published online 4/1 saying that this situation with the opera needs looking into and that opera is important! Something of a breakthrough!

I heard again that Ian Campbell gets to take the proceeds of the sale of all props, costumes, sets, etc., and then his severance/retirement will be activated. I know Mrs. Cohn said he isn't getting retirement benefits, but does that mean he isn't getting healthcare, or that he isn't getting any money following the closure of SD Opera.

Because I have also heard that he will be paid his salary through 2017 no matter what.

I can't quite figure things out here, but maybe you have better information.

eastlaker: Cohn insists Ian's pay ends when the closure is completed, supposedly this summer, and he and Ann get no retirement benefits at all. The truth will come out on that point, I am quite sure. The rumor is that Ian and Ann have $2.5 million in retirement funds coming, and a bankruptcy would interfere with that. They would have to get in line with other creditors. Cohn denies that.

But since the company does not have debt, to my knowledge, a bankruptcy is out of the question. Best, Don Bauder

There is something very strange about the decision to wind-up the opera. They want to avoid a bankruptcy to save face? You avoid a bankruptcy to keep the trustee and accountants from reviewing the books for unlawful transfers and malfeasance. What fear is there of charging on even in the face of a bankruptcy? The San Diego Symphony did not fold. They charged on until they could not pay the bills. If companies used the logic of ““better get out before it’s too late” I would guess that 25% of businesses in San Diego could rationalize closing. That is not leadership, it is defeat without even fighting.

So who would be the biggest creditors in a San Diego Opera bankruptcy? Looks like the top creditors would be the Campbell duo and the city for the rent. Since one of the potential the biggest creditors also serves on the board, which seems like a colossal conflict of interest. The Campbell’s should be working at the pleasure of the board of directors, not serving on it.

That is just my opinion. I know little about how art companies operate, but I do now when a fox should not be guarding the chicken coop.

In a private or public, for-profit companies, executives often serve on the board of directors. However they usually are founders or major investors in the concern. Non-profits or organizations that do not have shareholders should have a separation of powers for those who are on the board overseeing the concern and those who are on the payroll, executives and so forth.

Ponzi: If you look at the big blue chip companies, you will find that some executives serve on the board -- many are chairmen of the board -- and they were not amount founders or even major investors. At a large blue chip, the president may have less than 1% of the stock. Best, Don Bauder

Lies & Deception? This entire story is positively operatic in its twists and turns. From the very start, the sudden announcement made no sense at all and in the vacuum of information, everyone starts speculating. Perhaps the Campbell's have spent the past 30 years in such total control of their hand-picked Board that they felt they could take this one last act--shutting down the Company rather than trying to save it--with no questions asked. The story of their contractual golden parachutes has been told far and wide; now that Mrs. Cohen has denied it, one wonders--are they backtracking in the eye of the storm?

The Campbells have been so highly compensated that perhaps they forget what it's like to live on a $35,000 salary in San Diego. And that is why the staff is so furious, so wounded, and so scared. No job, no health insurance. Their separation papers promised COBRA, but a few days ago, COBRA was suddenly taken off the table. So in less than a month, all of those hardworking, mostly middle-class San Diegans are in desperate straits.

I heard that the Opera bought both Mr. and Mrs. Campbell brand new and expensive cars just a few years ago--BOUGHT, not leased, to the tune of $100,000 total for both. What kind of craziness is that? No one begrudges them that perk but profit and nonprofit groups lease cars for execs, they don't buy them. And what happens to those cars now? Do the Campbell's get to keep them?

It is those kinds of stories that are swirling around. And it doesn't appear that the media is doing much investigation. Don, you began your articles a few days ago by admitting that you are friends with the Campbells and have a long history with the opera, including as a donor. Do you really have the objectivity to report? I'm glad to read a bit more skepticism on your part now, but given how you have often eviscerated San Diego politicians and community leaders in other sectors, I have found it troubling to see you as a bit of an "apologist" for what might be real nonprofit malfeasance. The real tragedy, besides what has happened to the opera staff, is that all the music lovers in San Diego will be robbed of something that gives them great joy and solace.

Ian Campbell probably should have retired a few years ago, and Ann Campbell too. They should have let new blood take over. Perhaps they are both just way too tired, too ossified in their ways, and probably a little resentful that all their hard work is not being properly appreciated now that it's all unraveling. What a mess. Operatic!!!

Anon92067: We are sitting with two things: 1. Rumors of fat retirements; 2. The chairwoman's statement that there will be no retirement pay.

I think you are right that Ian and Ann had dominated the board and probably thought they could close things down without a fuss. However, they did go out and hire a public relations person, so that might not be true, either.

You are right: initially, I tended to give Ian and Ann the benefit of the doubt. I had been watching opera statistics from around the nation and knew of the problems. But the more I pondered this, I got madder and madder at the way it was handled. Also, I kept wondering if alternative survival strategies had been considered. I asked questions: 58 people could have voted, but only 34 did. It was because the dissolution vote was not even on the agenda. The news was leaked to the Union-Tribune before the board voted.

The board and management simply MUST give out more information. If they won't, they should be forced to do so through a lawsuit or perhaps a City investigation.

So, here's my take: grand opera is in the early stages of a death spiral. No doubt. Maybe SDO was getting ahead of the curve. But the fact that this has been handled so hurriedly and abysmally demands release of detailed information -- how many on the board knew of the gravity, how many chewed over alternative survival strategies, etc. And why did the company announce next year's operas if death was so close? We can't let the opera get away with clamming up. Best, Don Bauder

I think what is going on here is a lesson in semantics. If, as I heard, Mr. Campbell and his ex-wife will be paid through 2017 whatever their salaries are, then perhaps that is not being considered retirement pay, although they would not be working for the SD Opera. Just being paid by them.

Supposedly they will not get health benefits.

But Mr. Campbell does get the proceeds of the sale of all sets, costumes, props, music (?), etc. owned by the opera...while Karen Cohn might not call that a golden parachute, if it is indeed true that terms of his contract put all this in Mr. Campbell's hands...then I would have to say this has been one elaborate and sickening set-up.

Many people are grateful to you, Don, for pursuing this so doggedly. It truly may be too late, but if the group of disgruntled Board members are able to obtain the documentation they request--and they have a full right to do so--then they might see a different picture than that painted by the SDO leadership all these years.

There is no question Ian Campbell is devoted to grand opera, and he has been prescient in finding young talent. But he SHOULD have had a managing director to rein him in. Having him control everything--and his wife (now ex-wife) in charge of all fundraising--was, in retrospect, a real recipe for disaster.

I enjoy opera, but would have enjoyed seeing Man of La Mancha as much as I will enjoy Don Quixote. I nearly flew to Chicago just to see that magnificent performance of Oklahoma. And if you look at the Lyric's upcoming schedule, you see a great mix: https://www.lyricopera.org/subscriptions/index.aspx -- including Carousel! That I like all music doesn't make me a philistine, just broad-minded! Why couldn't a re-constituted San Diego Opera follow that model?

Anon92067: I don't think it is too late for several reasons: 1. The board voted, although the matter was not on the agenda. I think a court would void that vote; 2. Ian Campbell and Karen Cohn are required to turn over the information requested by the eight board members. That information could lead to other lawsuits that would delay matters; 3. The petition with more than 16,000 signers in only a few days shows that there are a lot of unhappy people; 4. Campbell and Cohn must reveal why they refused to give information to board members who asked for it more than a week ago. At the very least, there will be a significant delay, and much information to sift through. Best, Don Bauder

Paul Pelkonen; I haven't seen Man of La Mancha so have no idea if it is a stinker.But I do enjoy Merry Widow, Die Fledermaus, other Lehar, Gilbert & Sullivan, Offenbach, some American musicals. Why was Ian so sure such lighter fare wouldn't work? Before his time, an excellent SDO Merry Widow was televised nationally and helped put the company on the map. The Sutherland/Sills Fledermaus, also before Ian's time, was a hit, even though both sopranos were on the other side of the hill at the time.

The biggest question -- which must be explained -- is why this was sprung so suddenly and the company is being liquidated so quickly. Anyone who believes something is rotten in Denmark should not be dismissed. Best, Don Bauder

They are being called rumors, not baseless rumors, so I am tending to think there is something to all this. Mr. Campbell apparently has things all figured out. I hope the rest of us get a chance to know what he knows before he skips town.

operanow: I saw this and tried to get to Kleinfeld today. I have been unsuccessful, unfortunately. He is a lawyer in L.A. I got to his secretary and left a message, but have heard nothing. Best, Don Bauder

Erik Schwartz: Many thanks for that information on Gelb. That was one of the things I was going to look up. I still will, but if your figures are correct, the combined compensation of Ian and Ann Campbell was outrageous compared to Gelb's pay at the Met. Best, Don Bauder

There’s no problem in Houston. Perhaps the San Diego Opera should consider hiring Houston Grand Opera’s public relations firm. They established a goal of raising $165 million by the end of 2014. They raised $127 million as of March, 2013 according to a story in broadwayworld.com.
Don’t make fun of Texas anymore. Not only are they poaching California’s businesses but they have a more active devotion to culture and arts.

Ponzi: I just have to retell this story. A 450-pound Texan died while visiting Colorado. Officials called all over the state but couldn't find a casket large enough to bury him in. So they gave him an enema and buried him in a shoe box. Best, Don Bauder

Meryl Burke: Joan Kroc -- a wonderful lady, incidentally -- kept the opera going for another five years, including the chairwoman. But her preferences don't carry any weight now that her bequest has been eaten up. Best, Don Bauder

Wulfano Ruiz Sainz: Disagree. I go to several operas a year at different locations and listen to opera CDs and watch opera DVDs every night. Come to think of it, though, I will be 78 in May. Best, Don Bauder